How Flipkart's app strategy has helped Amazon India

Amazon has taken pole position on the web side of Indian e-commerce, a move that was perhaps aided in no small measure by Flipkart's decision to take its eyes off the web and focus on its mobile app.Shalina Pillai&Digbijay Mishra | December 15, 2015, 14:46 IST

FILE PHOTO: Amazon has taken pole position on the web side of Indian e-commerce, a move that was perhaps aided in no small measure by Flipkart's decision to take its eyes off the web and focus on its mobile app.BENGAULURU: Amazon has taken pole position on the web side of Indian e-commerce, a move that was perhaps aided in no small measure by Flipkart's decision to take its eyes off the web and focus on its mobile app. Mobile accounts for 70-80% of e-commerce traffic today.

Amazon issued advertisements in leading newspapers on Monday pointing out the achievement. And the American e-commerce giant's founder and CEO Jeff Bezos wrote a letter -- displayed prominently on its website -- thanking Indian consumers for making the local arm of his company the most visited e-commerce site in the country.

The letter said: "Just two and a half years from our launch, Amazon.in has become the most visited e-commerce site in India. This customer response continues to amaze and energize us...We will keep growing our investments in India and continue to work hard for our Indian sellers and customers."

TOI had noted in October that Amazon India's website traffic had increased sharply over the past year and had caught up with Flipkart in September. The performance is seen as commendable considering Flipkart was founded in 2007, while Amazon came into India only in 2013.

When contacted, both Flipkart and Snapdeal declined to comment on Bezos's claim. But Amazon's rivals shared mobile app traffic from multiple sources that showed that some of the Indian players were still well ahead of Amazon on this front.

Flipkart and its subsidiary Myntra have publicly articulated a mobile-first strategy. Paytm, a major player now in e-commerce, started as a mobile app.

On Monday, in a tweet, Paytm founder and chairman Vijay Shekhar Sharma took a dig at Amazon saying: "Difference of what you measure, totally based on when were (sic) you born." He appeared to be referring to Amazon being born in the desktop web era, and Flipkart and Paytm in the mobile era. He also attached a graph from AppAnnie, an analyst firm for mobile apps, which showed Flipkart topping the chart in terms of monthly active users and total number of downloads among top retail apps, followed by Paytm.

Data by another analytics company, SimilarWeb, showed that for the September-November period, Flipkart's daily active mobile users stood between 5% and 10% of total app users in the e-commerce segment, while for both Amazon and Snapdeal, this was less than 5%. The app installs for Flipkart during the same period ranged between 35-40% of all e-commerce app installs, way ahead of Snapdeal and Amazon, which were between 10% and 20%. But many of these measures also show Amazon rising on the mobile side faster than most of its rivals.

“Every company has their own set of metrics to gauge performances while the rivals may agree or may not. The key to ensure the top position over the long term is to ensure the basics.The topline, EBIDTA margins and similar metrics will become more relevant over time,“ said Sandeep Ladda of consulting firm PwC.